City loan part of Wood Fire salePublished 8:32pm Tuesday, May 14, 2013
A revolving loan fund established several years ago by the City of Dowagiac will be used for the first time to facilitate the sale of Wood Fire Italian Trattoria.
Dowagiac City Council Monday evening authorized the city manager and city attorney to develop documents for a $75,000 loan.
Terms of the proposed loan include evidence of a bank commitment to finance; an interest rate the same as charged by the bank; a repayment schedule based on a 10-year amortization schedule with a balloon payment in five years (60 months); with the city loan in second position on the real estate.
City Manager Kevin Anderson said Dowagiac established the revolving loan fund, or RLF, with the assistance of a grant to help the city with economic development projects where a development was eligible for bank financing, but needed “gap” financing.
The city staff has for several months been working with Jerry Kramer to secure financing for the purchase of Wood Fire.
“It is my understanding he has received a loan commitment conditioned upon receipt of RLF commitment from the city,” Anderson said.
“This particular project fits quite well with the stated purposes of that revolving loan fund, which is to have experienced people, in whatever line of business they are, especially downtown or in the industrial park.
“Mr. Kramer has 12 to 15 years experience running restaurants in the New Buffalo and St. Joseph areas. He has received a financial commitment letter from Chemical Bank, so we do have evidence of that. We’re working on the rate right now.
“Wood Fire has certainly become a destination restaurant.”